When our kids were younger $5 and a trip to Dollar Tree could fill a rainy afternoon. They would pace the aisles giving great thought to what was worth their money. Now that they are teens and tweens it isn’t that easy (or as inexpensive)! What I didn’t realize at the time was that this activity was doing more than filling time; it was an exercise that began to teach them about finances.
Even with a financial professional in the household, I’ve recently wondered if we are doing enough to set our kids up to be financially literate as adults.
It’s easy to say “just lead by example” but in a world where most of our transactions are done with a swipe of a card or the flick of a smartwatch, they don’t see us feeling the pain they experienced in those early days at the dollar store.
To get our family on track and help others I’ve compiled some tips and tricks for teaching kids about money into a two-part blog series.
Teaching needs versus wants is an obvious first step and can be started very young. It’s easy and effective to gently correct your toddler every time they claim to need something such as a toy or a treat. This helps get them in the mindset of prioritizing.
Once they are a little older starting them on an allowance is important. It shouldn't be so much that they can buy everything they want but enough for something small or a few treats. If they want bigger ticket items have a conversation about saving and delayed gratification. I believe the allowance should come in the form of cash, so they have to part with it. Still, each week my son asks for his in the form of a request for Roblox money instead 🤦♀️.
We haven’t started our children with debit cards yet, but it’s on the horizon. There is a convenience factor with older kids who are starting to spend more time away from their parents. If it can be associated with a savings account even better; a young saver might start to earn interest. The spender will experience the very adult feeling of seeing a dwindling balance. Both are teachable moments!
Stay tuned for part 2; I’ll discuss saving and budgeting. As always, if you have any questions or ideas for future blog topics feel free to email us. firstname.lastname@example.org.